Report to the Global CCS Institute on legal and regulatory developments related to carbon capture and storage between November 2010 – June 2011

As a part of the Policy, Legal and Regulatory (PLR) team’s research and preparatory activity for the drafting of the Global Status of CCS Report 2011, a legal and regulatory scan of the CCS legal and regulatory environment was commissioned from Baker & McKenzie.

The study is aimed at providing a comprehensive overview of international, regional, national and sub-national legal and regulatory developments; including details of negotiations currently in progress, the signalled intent of future CCS legal and regulatory decisions and the status of implementation of regulation in a number of countries. Fifty-one jurisdictions were surveyed in total, including the EU’s Member States, Federal and state level jurisdictions in Australia and the US and those developing nations which are the focus of the Institute’s capacity development activities.

The Institute’s PLR team worked closely with Baker & McKenzie to develop the scope and format of the research; ensuring a detailed final report and accompanying legislation tables, as well as a process which is potentially replicable in the future.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies Canada

CCS policy will ultimately be driven by the western Canadian provinces, which need CCS to be aviable alternative to dramatic emissions reductions. To date, the focus in Canada has been onfunding pilot CCS projects and not developing a coherent set of standards for the proper implementation of CCS activities.

In order to encourage CCS project development, Canadian jurisdictions will need to develop regulatoryframeworks able to deal with the unique qualities of CCS projects. Existing pipelines and mininglegislation could be adapted to this purpose.

In May 2009, a consortium led by WorleyParsons and comprising Schlumberger, Electric Power Research Institute and Baker & McKenzie was engaged to undertake the Strategic Analysis of the Global Status of Carbon Capture and Storage.

The consortium was tasked to undertake a comprehensive survey of the status of CCS and to develop a series of reports analysing CCS projects, the economics of CCS, policies supporting CCS development and existing research and development networks. A fifth report - the Synthesis Report - was also developed and this summarises the findings of the first four reports, and provides a comprehensive assessment of the gaps and barriers to the deployment of large-scale CCS projects, including strategies and recommendations to address these issues.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies China

From now until 2020, the PRC aims to spend a significant portion of its own GDP on technology research and development. GHG reduction initiatives such as CCS could capture a significant portion of those funds.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies, international policy and legislation

In May 2009, a consortium led by WorleyParsons and comprising Schlumberger, Electric Power Research Institute and Baker & McKenzie was engaged to undertake the Strategic Analysis of the Global Status of Carbon Capture and Storage.

The consortium was tasked to undertake a comprehensive survey of the status of CCS and to develop a series of reports analysing CCS projects, the economics of CCS, policies supporting CCS development and existing research and development networks. A fifth report - the Synthesis Report - was also developed and this summarises the findings of the first four reports, and provides a comprehensive assessment of the gaps and barriers to the deployment of large-scale CCS projects, including strategies and recommendations to address these issues.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies The European Union

The European approach to CCS policy and legislation represents some of the most comprehensive proposals for the regulation of commercial CCS facilities in the world. The CCS Directive, in particular, is a significant step towards the widespread deployment of CCS technology. It endeavours to remove regulatory barriers to CCS projects and, in doing so, amends a number of general European legislative instruments.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies India

India does not currently have any integrated policies or legislation dedicated to encouraging the development of CCS technologies or regulating the conduct of CCS projects in India. The National Clean Development Mechanism Authority of the Ministry of Environment and Forestry, Government of India has initiated executive moves to investigate the potential of CCS.

To date, however, no CCS specific legislation has been implemented. The Government of India is in the process of creating public awareness and undertaking research and development for CCS technology and activities. Workshops and discussions are taking place throughout the country to investigate the potential for CCS in India.

It is foreseeable that the mandate for CCS would come under a broad legislative framework that would aim to limit India’s GHG emissions. Analysts are of the view that linking CCS with the CDM is necessary before India can support the inclusion of CCS under the CDM umbrella.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies Indonesia

Indonesia has not introduced any policies or legislation dedicated to encouraging the development of CCS technologies or regulating the CCS project cycle.Indonesia has introduced a number of climate change and energy conservation policies which could provide a framework for high-level policy support for CCS incentives.

The Indonesian Government is cooperating with the governments of other countries including Norway and the United Kingdom to map potential CO2 sequestration sites in Indonesia.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies Japan

Current government efforts to revise the Japanese legal system to facilitate CCS projects, and financial support for research, development and demonstration projects in the area of CCS are also a result of Japan’s commitment to CCS. The Government's Action Plan for Building a Low Carbon Society, released in 2008, aims to:

reduce the costs of CO2 separation and capture to around 2000 yen per tonne by 2015;

reduce the costs of CO2 separation and capture to around 1000 yen per tonne by 2020;

begin a large-scale CCS project early in 2009; and

work toward making CCS projects and technology accessible and possible to implement on a commercial scale by 2020.

This is to be done through, amongst other things, improving monitoring and environmental impact assessment capabilities and revision of legislation and regulations as required.

Strategic analysis of the global status of carbon capture and storage. Report 3: country studies Mexico

The National Strategy issued in 2007 considers CCS projects as priority field of research, due to their utility for CO2 capture potential, as well as the opportunity they present the state owned oil producing company, PEMEX. CCS projects may be feasible for the oil field of Cantarell and other declining oilfields to increase oil recovery.

Nonetheless, the National Strategy concludes that these projects are very costly. This may, however, be compensated by financing from CDM projects. The National Strategy also considers that further research is required regarding long-term environmental effects.

While there are is no CCS specific legislation or regulation, existing laws may be applicable to particular CCS activities. These laws may also provide guidance on the future approach taken by the Government in implementing a regulatory framework for CCS activities.

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